Risks closing in on the Bank of Japan’s monetary easing policy
In the Tokyo stock market on the 10th (Monday), the closing price of the Nikkei Stock Average rose up to 13,514 yen, 636 yen higher than the last weekend. It was a major increase for the first time in approximately four years and eight months, achieving the highest value for this year.
However, the Nikkei Stock Average is declining since peaking on May 23. The foreign exchange is also fluctuating, with the yen exchange rate in the New York foreign exchange market on the 11th appreciating up to 1 USD=95.59 JPY at one point. The yen may have been bought due to the Bank of Japan (BOJ) deciding on maintaining the current status of its financial policy. Although I am planning to go on an overseas trip during the summer holidays, finding the timing for converting money would be difficult since it is hard to read the fluctuation of foreign exchange and determine if the yen will continue to weaken or not.
I heard from a friend of mine who works at a travel agency that there have been more people applying for overseas trips despite the yen being weak this year. Among those who plan ahead, apparently, there have already been bookings on the New Year’s long holiday season. I wonder what will happen since Abenomics seem to be running out of steam….
It seems that the summer bonus for this year, particularly among major companies, is expected to be higher than last year’s. However, since the majority of Japanese companies are small-and-medium sized enterprises, it doesn’t mean that economy is doing as well as the media portrays. The National Enterprise Bankruptcies Report in May shows that 950 companies went bankruptcy this month. Although the number has decreased compared to the same month a year ago, this is the highest number of bankruptcies this year. There have been many who voice their concerns that the number of bankruptcies will increase after the Upper House election next month.